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USD/CHF defends 0.9750 support, Fed decision holds the key

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Posted at 2016-9-23 13:10:35 | All floors |Read mode
Having tested an important confluence support near 0.9755-50 region, the USD/CHF pair has managed to bounce off session low but maintained its losses below 0.9800 handle.
Currently trading around 0.9770-75 band, the pair has been confined between 200-day SMA resistance and 100-day SMA support as investors now await for the outcome of Federal Reserve's two-day monetary policy meeting. The Fed is scheduled to announce its monetary policy decision later during US trading session and is expected to infuse additional volatility in the FX market.
Market players will closely scrutinize the accompanying policy statement and FOMC economic projection in order to evaluate the possibilities of an eventual Fed rate-hike action in 2016. Moreover, comments from the Fed Chair Janet Yellen, during subsequent press conference, might provide additional hints over the central bank's monetary policy outlook and hence, would be the key determinant of the pair's next leg of directional move.
Technical levels to watch
Recovery momentum above 0.9790 might continue to confront strong resistance at 200-day SMA near 0.9805-10 region, which if cleared decisively is likely to boost the pair immediately towards 0.9835 en-route monthly high resistance near 0.9885 level.
On the flip side, sustained break below 0.9755-50 confluence support (50-day and 100-day SMAs) seems to drag the pair immediately towards 0.9715 before the pair eventually drops to test its next major support near 0.9675 level.
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